On the last tip we saw How to Add an Indicator to a Graph on Metatrader 4.  Today, we will focus on the use of the Forex Indicator Stochastic-Oscillator on MT4.

The Technical Analysis Indicator for Forex Market, STOCHASTIC, belongs to the OSCILLATORS classification and allows us to identify purchase and sales chances when we face market channel behavior. 

On this graph, we see 4 possible incomes (tagged in yellow). In the EURUSD pair, entry points  are given when the Stochastic Indicator crosses from above the 75 level or below the 25 level.

When the Forex Stochastic indicator is between the levels of 75 to 1, we say that the pair is an Over Bought and we will look for short positions.

When the Forex Stochastic is below the levels of 0 to 25, we say that the pair is in an Over Sold and we will look for long positions.

Forex Stochastic Indicator

It’s always important to confirm the given signal by the Forex Stochastic Indicator with other indicators like, for instance, with a 5-period MA (in red).